Overview

Consumers today are inundated with a wealth of online information when it comes to making purchases and other choices that affect their health, safety, and well-being. What happens, though, when physicians and businesses fail to disclose unfavorable information about themselves and their establishments? Do consumers take their business elsewhere?

New research by Sunita Sah, assistant professor of management and organizations and the John and Norma Balen Sesquicentennial Fellow at Johnson, and Daniel Read, professor of behavioral science at Warwick Business School, shows that consumers aren’t necessarily turned off by omitted negative information and can be surprisingly forgiving.

In a recent article in Harvard Business Review, Sah and Read discuss their findings and recommend ways to help consumers make decisions that are in their own best interest.

Key Takeaways from the article in Harvard Business Review:

Sah and Read found consumers to be naïve and trusting of service providers who were clearly withholding information that was critical to their decisions.

In a series of experiments with 1,700 participants, they found that it was much better for a business to refuse to disclose negative information rather than to reveal it, making consumers vulnerable.

Their research stands in contrast a large body of economic research, which theorizes that consumers will catch on when information is being withheld from them and make smart inferences about what that means.